FMA 5 of 5: Relate the importance of economics and accounting to finance

Relate the importance of economics and accounting to finance
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Relate the importance of economics and accounting to finance
Finance has a very close relationship to both accounting and economics. The three disciplines are applied together in financial management. There are varying important relationships and linkages among finance, accounting and economics. This paper seeks to relate the importance of economics and accounting to finance.
In relating the importance of economics to finance, there are two vital connections. The micro economic theory offers a theoretical foundation for financial decision making tools. Macro economics theory illustrates the settings where financial firms conduct their operations. The key developments in the spheres of macro economics and their effects on the firms cannot be over looked by any finance manager. The macro economic factors such as growth rate, tax environment, inflation rate, and the role of government i...